Neocloud Stocks Plummet on Rising Overspend Fears. CoreWeave Down 7%, Nebius Down 5%, Terawulf Down 6%

CoreWeave, Nebius, and Terawulf stocks have seen significant declines of 7%, 5%, and 6% respectively, amid fears of rising overspending in the neocloud sector. This downturn is primarily attributed to the surge in long-term interest rates, which have hit a 19-year high for the 30-year Treasury yield, making capital-intensive neocloud projects more expensive and reducing the value of long-term revenues.

Analysts are increasingly questioning the long-term durability of AI spending commitments, as evidenced by the missed revenue expectations of Anthropic and OpenAI, as well as a Wall Street Journal report on $3 trillion in off-balance-sheet AI commitments. Despite strong operating results, including double-digit revenue growth for CoreWeave and Nebius, the mounting concerns over financing costs and AI spending commitments have caused investors to reprice the neocloud stocks negatively.